ECB divided? It’s NFP Friday
City Index May 3, 2013 1:52 PM
<p>It’s been the usual pre-NFP session in Asia, not helped with Japan still celebrating golden week. The euro still languishes pretty close – the lows […]</p>
It’s been the usual pre-NFP session in Asia, not helped with Japan still celebrating golden week. The euro still languishes pretty close – the lows (1.3036) made following the ECB announcement and press conference yesterday. As I mentioned yesterday the 25-basis-point cut was already priced into the single currency which saw the euro initially rally back above 1.3200 following the announcement. With ECB President Draghi again talking about negative deposit rates to get the banks lending, the euro crumbled. I personally think this is another classic European plan to make a plan. We have heard the ECB President mention negative deposit rates before so this isn’t new news and there wasn’t any detail on how this will be achieved in yesterday’s statement as far as I can see. Interesting that the press are picking up on how many members voted for a 50-basis-point cut with the FT highlighting a spilt from the Bundesbank with Jorg Asmussen voting against the cut and President Weidmann voting in favour in of the cut. Both members share scepticism that the cut would have any effect on market interest rates.
Turning to today we have the all important UK services PMI data release this morning, with the market looking for 52.4 following stronger manufacturing data earlier this week and a stronger growth story last week. As always I point out that the UK is a service driven economy these days so this number is important to what some are calling the recovery.
The main event of the day will be the NFP release, with the market looking for a rebound from 88k last month to 140k with the unemployment rate looking to hold steady at 7.6%. We have seen mixed data this week leading up to the labour report, with the ADP report showing a weak reading from the private sector as the jobless claims data revealed a brighter picture.
Supports 1.3030-1.2975-1.2955 | Resistance 1.3150-1.3245-1.33315
Supports 97.50-97.00-96.30 | Resistance 98.50-99.00-99.75
Supports 1.5500-1.5470-1.5410 | Resistance 1.555-1.5600-1.5630
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.